The political economy of efficient public good provision: evidence from Flemish libraries using a generalised conditional efficiency framework
AbstractProvision of most public goods (e.g., health care, library services, education, utilities) can be characterised by a two-stage ‘production’ process. The first stage translates basic inputs (e.g., labour and capital) into service potential (e.g., opening hours), while the second stage describes how these programmatic inputs are transformed into observed outputs (e.g., school outcomes, library circulation). While the latter stage is best analysed in a supply-demand framework, particularly in the former stage one would like to have efficient public production. Hence, unlike previous work on public sector efficiency (which often conflates both ‘production’ stages), this paper analyses how political economy factors shape efficient public good provision in stage one (using local public libraries as our centre of attention). To do so, we use a specially tailored, fully non-parametric efficiency model. The model is rooted in popular Data Envelopment Analysis models, but allows for both outlying observations and heterogeneity (i.e., a conditional efficiency model). Using an exceptionally rich dataset comprising all 290 Flemish public libraries, our findings suggest that the ideological stance of the local government, the wealth and density of the local population and the source of library funding (i.e., local funding versus intergovernmental transfers) are crucial determinants of library efficiency.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces09.10.
Date of creation: Jun 2009
Date of revision:
Nonparametric estimation; Conditional efficiency; Political economy; Public good provision; Libraries.;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-14 (All new papers)
- NEP-EFF-2009-11-14 (Efficiency & Productivity)
- NEP-PBE-2009-11-14 (Public Economics)
- NEP-POL-2009-11-14 (Positive Political Economics)
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- Peter Bönisch & Peter Haug & A. Illy & L. Schreier, 2011. "Municipality Size and Efficiency of Local Public Services: Does Size Matter?," IWH Discussion Papers 18, Halle Institute for Economic Research.
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